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Just when the stock market was starting to win back the confidence of individual investors, its January slump sent shareholders a chilly reminder of Wall Street’s volatility.

The Dow Jones industrial average, which caught the eye of many skeptical investors last year as it set dozens of record highs on its way to a 26.5 percent increase in 2013, has stumbled out of the gate in 2014, sliding by 5.3 percent so far this year.

And many investors remain wary, local money managers said.

“There is a lot of talk about the market, but people are still quite wary, and rightfully so,” said Peter Aleksandrowicz, a registered financial consultant in Hamburg and president of Aleksandrowicz Private Investors Group. “It’s not like in the ’90s, when people said, ‘I really want to be in it.’  ”

But are last year’s plump gains enough to convince investors to shake off the January slump and restore the voracious appetite for stocks that existed before the market’s epic free-fall five years ago?

Lawrence V. Whistler, president and chief investment officer for Nottingham Advisors, an Amherst asset management firm, said many investors haven’t forgotten 2008 and 2009, when stock portfolios nearly evaporated as the Dow plunged.

“Investors are still affected by 2008 for sure,” said Whistler. “It helped frame a certain risk aversion that’s been the norm for three or four years.”

The headline-grabbing pace of 2013’s market gains – combined with rare losses in bonds last year – has convinced some investors at both the individual and institutional level to consider increasing their equity exposure.

But investors shouldn’t switch up their portfolio asset allocations simply because they feel they’re missing out on stock market gains, Whistler said.

It’s human nature to become more comfortable with greater risk, as the market performs better.

But, Whistler said, “when it feels safe again, the easy returns are gone.”

The January slump was triggered by concern that a sell-off in the currencies of developing nations could spark an uptick in volatility across the world’s financial markets. Those worries offset solid fourth-quarter earnings reports, which have generally been rising and, just as importantly, coming in above analyst forecasts.

That’s why Whistler cautioned investors not to go overboard. Tweaks to portfolios and investment allocations should be done “as long as it’s consistent with your long-term financial plan. You have to ignore the noise.”

Above all, investors need to stick to their financial plan, said Richard Schroeder, certified financial planner and executive vice president and managing partner of Schroeder, Braxton & Vogt Financial Advisors in Amherst.

Schroeder said that most of his clients are savvy, patient investors who are just excited to see their portfolios growing again.

“They’re not calling and beating the door down to ask for more stocks,” he said.

“You want to make a change only because of your objectives or needs,” Schroeder said. “The first thing is not whether you missed out on something in 2013.

“Investors are generally ruled by fear and greed. You have to resist both extremes.”

Five years ago, fear prevailed, pushing some investors to sell off stocks in the anticipation that they would fall even lower. It was obviously a bad move, as the market has climbed all the way back and then some.

“For the same reasons you didn’t sell your stocks in 2008, you don’t put all of your money in stocks in 2014,” said Schroeder, who recommends diversifying with commodities, commercial real estate and bonds, even though the bond markets are down.

On the flip side, investors shouldn’t delay increasing their stock allocations because they think the market is about to tank again.

“If you need to make a change, now is the time to do it,” he said. “Bull and bear markets can outlast your patience.”

Investors who sat out the market over the past few years can still get back in and make money, as long as stocks are a long-term proposition, especially since few other investment options are likely to generate better earnings, added Aleksandrowicz and Whistler.

“The retail investor, like usual, is late to the party,” Aleksandrowicz said.

Still, with increased volatility predicted for 2014, there should be opportunities to buy back in.

“The stock market is not cheap, but I think it’s going to go higher,” Whistler said.

Added Aleksandrowicz: “We can’t look back, but I think if you do this correctly, there’s still gain in the market.”

email: jtokasz@buffnews.com